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At new session, budget and jobs most pressing issues

Gov. Tim Pawlenty and legislative leaders will start the 2010 session today a lot like they ended the 2009 session--slugging it out over how to erase a large budget deficit and create jobs.

Lawmakers need to fix a $1.2 billion shortfall in the current two-year budget. Financial experts blame the shortfall in large part on job losses. In turn, much of the 2010 session will also focus on ways to put people back to work.

Pawlenty's last chance for shaping policy

Pawlenty remains firmly opposed to any DFL suggestions to generate new revenue through tax increases. Pawlenty isn't running for re-election, so this year's session is his last shot at shaping state policy.

He wants to allow Minnesotans to purchase health insurance from companies in other states, add a cap on state spending to the Minnesota constitution and impose tougher sanctions for drunk drivers. But the governor recently told reporters that he knows fiscal matters will dominate the session.

"Clearly the bulk of the attention needs to be focused on the budget and the budget deficit," Pawlenty said. "That's the 800 pound gorilla for the session, and that's what needs to be dealt with."

Pawlenty insists that the $1.2 billion budget hole can be filled by spending cuts alone. He'll soon unveil a supplemental budget proposal that shows how. Pawlenty has already said he will protect public safety, military and veterans programs from cuts, and he's trying to do the same for K-12 education. But Pawlenty has already moved to delay aid payments to schools to help balance the state budget.

"Many states are just flat reducing and cutting K-12 spending," he said. "So, any school district who's concerned about that, they should know that the deferral of their payments is better than a flat out cut."

A new economic update early next month will provide a clearer picture of the current budget deficit, as well as the long range problem. Most lawmakers expect the state's red ink to surpass $5 billion in next biennium.

Pogemiller won't push Pawlenty on raising taxes, but Kelliher will

DFL Senate Majority Leader Larry Pogemiller said he still believes more revenue is needed, but he said he accepts the fact that the governor won't budge on taxes. Pogemiller said that means the budget solution will require deep and permanent spending cuts.

"Suggesting that whole sectors of the budget can be protected from sharing in the solution, I don't think that's either realistic or a productive way to proceed," Pogemiller said. "I think every Minnesotan is going to have to share in this solution and I think the sooner we get at it, the better it will be for the long-term prospects for economic growth and budget stability for our state."

Pogemiller might be backing away from a tax fight, but his counterpart in the Minnesota House is not. DFL House Speaker Margaret Anderson Kelliher, who's also running for governor, said spending cuts have already gone too deep.

"We're going to work our hardest to figure out common ground on this," she said. "But if it's going to start to effect the classroom, if it starts to effect the nurse who is delivering services in the hospital, then we're going to have to look very seriously at some other options."

Job growth a major issue

Debates over health care for the poor, nuclear energy and a Vikings stadium are also likely this session. But legislators from both parties say their priority will be trying to boost the economy and grow new jobs. Democrats are focusing on the construction jobs they say will come from a big bonding bill full of public works projects.

House Republican Minority Leader Kurt Zellers said he'd rather grow jobs by easing tax and regulatory burdens on businesses. Zellers said he thinks the benefits of a bonding bill are oversold.

"Depending on the amount we borrow, usually between $700 [million] and $800 million, it's about $100,000 a job," Zellers said. "The jobs last anywhere from three to maybe eight months. Now, if you're somebody who hasn't had a job for a year, that's a good idea. But if you're somebody who wants to go back to work permanently, it's only a stopgap measure."

Election year politics will also loom large this session, which must end by mid-May. All 201 legislative seats are on the ballot this fall, and more than a half dozen current legislators are running for governor. And there's also the ongoing speculation that Gov. Pawlenty is getting ready to run for president in 2012.